Advice to Recruiters: Alumni Connections Trump Compensation in the War for Talent

— April 11, 2016

New Research from NYU Stern & MIT professors urges companies to use employees’ alumni networks to recruit top MBA talent

Our research shows that MBAs are significantly more likely to accept an offer from a company after interacting with an alumnus from their school who works at that company.

In a new study, Professor Jason Greenberg of the NYU Stern School of Business and Professor Roberto Fernandez of MIT Sloan School of Management find that using the alumni connections of current employees to woo and win talent will yield better results than job offers extended through on-campus recruiting efforts, summer internships or other search channels.

“While money does matter when attracting talent, growth potential and other factors also play a big role in securing highly sought-after MBA candidates from top business schools,” explains Greenberg. “Our research shows that MBAs are significantly more likely to accept an offer from a company after interacting with an alumnus from their school who works at that company.”

After examining individual job search data from nearly 600 MBA students graduating from a top business school in 2009 and 2010, the authors share several key findings:

MBAs are more than 4 times as likely to accept a job offer found through faculty or alumni networks rather than on-campus recruiting.

Job offers received by students through strong social ties (e.g., faculty/alumni networks) are generally smaller in terms of total compensation than those derived from prior employers, summer internships or on-campus recruiting.

“Growth potential” is the #1 reason cited by MBAs for accepting a job offer.

“Based on our findings, recruiters earn a higher ROI when spending time and money on facilitating connections between current employees and potential recruits from their alma mater,” says Greenberg. “Students look to and trust an alumnus from their school who ‘looks like them in three years’ to provide inside information about growth opportunities within the firm. And that powerful association is a huge influencer when it comes time to accept or reject a job offer.”